Credit Card Advice for My Daughter

Even though I have been educating my kids about money management, it still seems that some of my messages land on deaf ears. My university going daughter recently received her first credit card. Here are some of the lessons I shared with her on managing her finances, especially her credit card.

Credit cards are like sharp knives. They’re wonderful tools, but they can damage you badly if you use them incorrectly.

Credit cards can be incredibly useful tools for convenience when doing many routine tasks, like buying gas. While most of these tasks also accept debit cards, I prefer using a credit card because if there’s an identity theft, the money is not drained from my checking account until I discover the issue.

Also, using your credit card can help maintain good credit history so that they can get good rates on a mortgage or line of credit. This is a great option as long as they follow what I consider to be the golden rule of healthy credit card usage: pay off the whole balance each month

The trick with credit cards is to not allow them to trick you into a false sense of financial confidence.
When you buy something with a credit card, it is not immediately reflected in the balance of your checking account,
and that fact can often lull people into a false sense of financial security, which can lead to overspending.

The trick is to understand what you’re spending and stick to a budget, whether it’s formal or not.

If you stick steadfastly to your budget, you will be spending less than you earn and you’ll always have enough to pay your credit card bill in full at the end of the month. 


I will continue to reinforce this message to my daughter until she fully practises these lessons.